Monthly Archives: February, 2013

Why Infrastructure Development Is Key To Africa’s Success

arn2When President Jacob Zuma announced the plan to spend $97billion on infrastructure to upgrade roads, rail and ports, some international rating agencies were very skeptical. The rating agencies fear that Africa lacks the capacity to manage political and economical challenges. In fact, Africa needs to and MUST invest in infrastructure because it is the very core foundation for economic growth.

Most challenges that Africa faces today for example food shortages are due to poor infrastructure. There are vast amounts of land for agricultural productivity, but lack of energy, irrigation and transportation are the stumbling block for small-scale farmers.  In the end they produce what they can consume quickly before pests destroy it, sadly much of Africa’s poor are the small-scale farmers.

Infrastructure is key to Africa. Rail and road networks that connect countries are much needed to improve cross-border commerce. The World Bank in its study, Africa’s Infrastructure: A Time for Transformation, says that the poor state of infrastructure in Sub-Saharan Africa—its electricity, water, roads and information and communications technology (ICT)—cuts national economic growth by two percentage points every year and reduces productivity by as much as 40 percent. The study team conducted an in-depth assessment of the state of infrastructure in 24 countries across the continent.

To close the infrastructure gap with other parts of the world, meet the Millennium Development Goals, and achieve national development targets in Africa within 10 years, an annual spending of $93 billion would be required. This estimate is more than double what was originally thought. This estimate is still short of what China allocated to infrastructure during the last 20 years, which only in terms of capital investment was the equivalent to 15 percent of its GDP.

The Africa Development Bank, (AfDB) met with the World Bank in January 2013 to discuss challenges and opportunities facing Africa, including rapid economic growth, new natural resource discoveries and urbanisation, as well as infrastructure deficits, climate change, food security and fragile states

“As trends show, Africa is changing very rapidly challenging all conventional norms including the way we do business as Multilateral Development Banks,” said Gilbert Mbesherubusa, AfDB Vice-President in charge of Infrastructure, Private Sector and Regional Integration, at the opening session of the three-day consultation.

Arnold Matimba worked in various sectors between 1995 and 2009 in the UK. His desire to see Africa’s success led him to set up Avalanche Consultants, whose main aim is to offer cross-cultural and consulting services to those keen to do business in Africa. (Twitter @ArnMatimba)